Should you invest in real estate this year?

It may be difficult to tell when and how to invest your money, especially if you don’t have equity to throw around. And of course, many people still have bad memories of the crisis in 2007. So why would now be the time to invest in real estate? What are the benefits of investing in real estate versus investing in stocks or cryptocurrency?

While we aren’t financial planners, we at Murfey Company understand markets and excel at taking advantage of opportunities available within a given market.

Investing in real estate means owning something tangible, as opposed to stock in Bitcoin, say, or other cryptocurrencies. While such cryptocurrency investments can potentially generate high returns, these are volatile and untested new markets and certainly not for the faint of heart. Those types of investments require lots of reading up and predictive strategy that might not be for everyone. And for investors looking for a retirement income, a more stable commodity like an income property may be a more reliable choice.

What’s your intention?

Think about the purpose of your investment. Do you want land, a rental income or an extra residence? Investigate trends in different communities and find which ones may be up and coming.

Or perhaps you looking to invest in a retail property or a multi-family dwelling. Look for a need in the community. This requires research, but consulting with an experienced real estate investment advisor can give you the big picture — as well as the confidence to pursue your investment goals.

These are cash-generating properties, but you are expected to pay the expenses of maintaining the property. If you aren’t prepared to invest a lot of time, consider hiring a property manager. This will cost additional money, so make sure you know how much will be required of you and how much time, let alone money, you are willing to invest before you sign on.

Are you looking for a nest egg property? The time to act may be close. Though home sales have stagnated recently, mostly because many baby boomers haven’t followed previous trends to downsize properties after retirement, real estate trends in 2018 predict that more properties will come available toward the later part of the year. If you have equity, have it ready now in order to get an edge on those properties as they become available.

Single-family homes are seeing an overall drop in construction because of the lack of space in many areas. Consider the potential of an urban infill investment if you are struggling to find development opportunities in a specific area.

What are the benefits of a real estate investment?

Most people are more familiar with owning property as opposed to owning and trading stock shares, and this makes the process more comfortable. Furthermore, it is more difficult to be defrauded in real estate if you’ve done your research. Remember, you can show up to inspect your property or run a background check on potential tenants, as opposed to throwing your whole trust into a broker or management firm.

If you make a smart investment (and take lessons learned from the bubble in the mid-late 2000s) by researching the property best suited for your income level and management style, then you can count on your property retaining and even improving its value. Where have people historically come to live? And are there adjacent areas that can be developed or renewed by your investment? Don’t hesitate to have second or third choice areas to invest in.

Next month, we’ll discuss how to look for cues in your community to make the best investment for your needs.

For those looking to invest in a multi-family project or if you have capital and are hoping to invest in launching another type of development deal, we at Murfey Company can work with you on your plan and provide sound real estate investment opportunities. For more information, visit us at www.murfeycompany.com.

Jesse Lyons is the director of operations and marketing for the Murfey Company.